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FOREIGN portfolio investment inflows arising from improving risk
appetites will complement the seasonal rise in remittances in
further strengthening the peso this week, the Bangko Sentral ng
Pilipinas (BSP) said.
“The peso is being influenced by global
developments and by inflows of remittances,” BSP Governor Amando
Tetangco Jr. , told reporters.
The local currency closed to a three-month high
of 47.04 last Friday. Remittances are peaking this month, prior to
the opening of classes In June.
“The movement of the peso is due in part to
the movement of the dollar. What we have seen in the past few weeks,
there has been some weakness in the dollar. This is partly because
there has been an improvement in risk appetite that has benefited
emerging markets including the Philippines in terms of portfolio
flows,” Tetangco said.
Sources said the BSP was heavily buying dollars
to prevent the rapid appreciation of the peso.
Of the total registered remittances of $4.1
billion at end-March this year, BSP data showed the bulk came from
the US reaching $1.676 billion, higher than Europe at $757.045
million and Middle East at $633.818 million.
Remittances from Canada reached $408.145
million, while the amount from the United Kingdom hit $195.270
million, or the biggest from Europe. Saudi Arabia registered
$364.022 million, the biggest contributor from the Middle East.
Germany contributed $111.466 million and Italy
registered $152 million in the first three months.
Remittances increased by 2.7 percent
year-on-year to $4.1 billion in the first quarter despite the
recession in major economies.
Domestic consumption is fueled by remittances,
which contribute 10 percent to the country’s gross domestic
product (GDP) growth.
A proxy for economic output, GDP represents the
amount of goods and services produced locally.
-- Maricel E. Burgonio
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